Friday, September 24, 2010

So, Does the PPACA Exceed Congressional Power?

As part of my effort to analyze the litigation attempting to block the Patient Protection and Affordable Care Act from taking effect, I've been walking through the recent Commerce Clause doctrine. I think we have enough background on the Court's opinions thus far to wade into the main issue of FL et al v. DHHS:

Does Congress have the authority to compel individuals to enter into an economic transaction?

This is precisely the question that Rivkin and Casey want the court to rule on. As noted in A Healthy Debate, the Congressional Research Service believes it is a novel question. In their words, the individual mandate is an "affirmative federal command that parties engage in a particular commercial activity." So, does Article I section 8 or any other part of the constitution allow the government to compel an economic transaction?

If we all think really hard, and have memories that last longer than 5 months, I think we can see a well-accepted constitutional example of such a transaction. Each year, nearly all Americans send the federal government a check, under threat of criminal prosecution, fines, and jail time. Though this is the language plaintiffs forward in their complaint to a federal judge, "The Act thus compels persons to perform an affirmative act or incur a penalty, simply on the basis that they exist and reside in the United States," taxation, surely, cannot be what Rivkin and Casey object to. What they must mean is: Can Congress compel through indirect means an economic transactions between individuals and a third party?

Rivkin and Casey forward the idea that because the activity that Congress is seeking to regulate on an individual level is a non-activity, it cannot be subject to federal action. Based on my reading of Lopez, Morrison, and Raich, the Court will not find this argument satisfying.

Rivkin and Casey want us to believe that Lopez and Morrison are highly significant cases which herald the rollback of the New Deal. Both cases did strike down statutes which criminalized non-economic behaviors. In pinning their hopes on such precedents, Rivkin and Casey are ignoring the centrality of the insurance market to interstate commerce as a broader phenomena. Scalia reminds us in his concurring opinion in Gonzalez v. Raich 545 U.S. 1 that the power to regulate non-economic activity which has a substantial effect on interstate commerce derives not from the Commerce Clause itself, but from the Necessary and Proper clause. Thus, "the category of 'activities that substantially affect interstate commerce... is incomplete because the authority to enact laws necessary and proper for the regulation of interstate commerce is not limited to laws governing intrastate activites that substantially affect interstate commerce. Where necessary to make a regulation of interstate commerce effectvie, Congress may regulate even those intrastate activites that do not themselves substantially affect interstate commerce." (emphasis in original). Amusingly, not only do Rivkin and Casey not engage Scalia on this point in A Healthy Debate, on page 98 they misquote him. They handwave the thrust of Scalia's point and go on to preach about limits to the Commerce Clause, noting Kennedy's concurrence in Lopez spoke highly of "vertical separation of powers." Rivkin and Casey simply assume that any commerce clause authority dispute will result in a struck-down statute because the Court says there "must be a meaningful limiting factor" (pp. 99) on Commerce Clause authority. Essentially, if they extend their academic arguments into the courtroom, they will be asking that the Court arbitrarily restrain Congress.

The entire discussion of Lopez and Morrison shows how truly lost Rivkin and Casey are here. These cases deal with activity that is far from economic activity, but has discernible effects on it. This is the stated reason for striking these decisions down. In the reasoning of both cases, justices note that if the statute had been an integral part of a regulatory scheme which was primarily concerned with interstate commerce, it would have survived. Insurance, on the other hand, is economic activity. The Supreme Court said so in United States v. South-Eastern Underwriters Association 322 U.S. 533. To claim that "insurance business is not commerce," in the words of Justice Jackson, "always has been criticized as unrealistic, illogical, and inconsistent with other holdings of the Court" Id., at 587. The PPACA is a law which seeks to regulate an expressly commercial interstate activity. The individual mandate is an integral part of the scheme of regulation. Aside from those hoping to draw an arbitrary line in the sand on Commerce Clause powers, every court watcher should expect the District Court to rule against Florida if it comes down to this argument.

NB: As far as I see it, getting the court to decide on this basis would be the best-case scenario for the plaintiffs. To even get to this point, plaintiffs must surpass a number of fairly high bars. All of the following conditions must be met before the authority of Congress to mandate coverage on individuals can be tested:

    (1) The $95 tax on people who choose to not purchase insurance is not a legitimate tax in its own right, and must be supported by a power other than the Taxing power. (2) The states are materially injured by the individual mandate (Standing). (3) Other gateway issues, and at least one other substantive issue which I've forgotten.

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